As a manufacturing supply chain matures, supplier businesses become more likely to outsource “non-core” processes or activities where they lack competitive advantages. These supply chain participants will focus their limited resources on those activities where cost savings or proprietary knowledge creates the most favorable operating environment. The automotive manufacturing industry is a prime example of a mature manufacturing supply chain. After a century of automobile production, the supply chain is segmented into supplier tiers: tier 3 suppliers provide raw components such as fasteners, cloth, galvanized tubing, etcetera to tier 2 suppliers; tier 2 suppliers apply processes to these components, in turn supplying components such as seating tracks, wire frames, electrical harnesses, etcetera to tier 1 suppliers; tier 1 suppliers apply processes to these components, in turn supplying components such as seating assemblies, exhaust systems, suspension systems, etcetera to original equipment manufacturers (OEMs); OEMs utilize components from tier 1 suppliers to assemble the final automobile product. The focus of optimizing resource utilization ensures that a business will always look to outsource activities where they do not enjoy a competitive advantage. Due to the trend in global outsourcing, manufacturers in a supply chain may locate facilities or production partners anywhere in the world—often in cost-effective jurisdictions.
Manufacturing supply chains often utilize two additional manufacturing techniques to minimize production costs; “Just-in-Time” manufacturing (or JIT), and “Lean Manufacturing” (LM). Essentially JIT and LM impose demands on suppliers to ensure a reduction in costs by eliminating excess inventories (JIT) and excess materials or capacity in production (LM). The disadvantage of both JIT and LM are that they are contemporaneously characterized by the absence of resources when required to manage unplanned circumstances such as the receipt of materials or the manufacture of components that fail to meet design specifications. Limited resources, strict production timelines and high quality standards have interrelated to create a demand for post-production quality assurance capacity. Just as in outsourcing components, processes and/or activities in which the manufacturer lacks a competitive advantage, post-production quality assurance capacity is similarly outsourced.
Companies offering post-production quality assurance services work with a diverse and geographically diffuse audience. The process of service requires coordination of quality testing activity; negotiating contracts, establishing error free quality testing methodology, recording and presenting quality test data, and cost management.